Document Content

Issuing a number of Regulations on construction and installation bidding

for construction investment projects financed with domestic capital sources under

the Transport ministry's management

THE MINISTER OF TRANSPORT

Pursuant to the Construction Law passed by the National Assembly on November 26, 2003;

Pursuant to the Government's Decree No. 34/2003/ND-CP of April 4, 2003 defining the functions, tasks, powers and organizational structure of the Ministry of Transport;

Pursuant to the Investment and Construction Management Regulation issued together with the Government's Decree No. 52/1999/ND-CP of July 8, 1999, which was amended and supplemented by Decree No. 12/2000/ND-CP of May 5, 2000 and Decree No. 07/2003/ND-CP of January 30, 2003;

Pursuant to the Bidding Regulation issued together with the Government's Decree No. 88/1999/ND-CP of September 1, 1999, which was amended and supplemented by Decree No. 14/2000/ND-CP of May 5, 2000 and Decree No. 66/2003/ND-CP of June 12, 2003;

Pursuant to the Planning and Investment Ministry's Circular No. 04/2000/TT-BKH of May 26, 2000 and Circular No. 01/2004/TT-BKH of February 2, 2004 guiding the implementation of the Bidding Regulation;

Considering the practical situation of the bidding work of investment and construction projects in the transport domain;

With a view to raising the quality of bidding, thus ensuring investment efficiency of projects;

At the proposal of the director of the Department for Quality Expertise and Management of Traffic Works,

DECIDES:

Article 1.- To issue together with this Decision a number of regulations on construction and installation bidding for construction investment projects financed with domestic capital sources under the Transport Ministry's management.

Article 2.- This Decision takes effect 15 days after its publication in the Official Gazette and replaces the Transport Ministry's Decisions No. 1626/1999/QD-BGTVT of July 6, 1999 and No. 316/QD-BGTVT of January 30, 2003.

All previous regulations of the transport service, which are contrary to this Decision, are hereby annulled.

Article 3.- The director of the Ministry's Office, the directors of the departments under the Ministry and the heads of the agencies and units in the transport service shall have to implement this Decision.

A NUMBER OF REGULATIONS ON CONSTRUCTION AND INSTALLATION BIDDING FOR CONSTRUCTION INVESTMENT PROJECTS FINANCED WITH DOMESTIC CAPITAL SOURCES UNDER THE TRANSPORT MINISTRY'S MANAGEMENT

(Issued together with the Transport Minister's Decision No. 06/2005/QD-BGTVT

of January 4, 2005)

Article 1.- The regulation on application

In the course of elaborating, appraising and submitting for approval bidding procedures and organizing bidding, investors or their representatives (referred collectively to as investors) that use domestic capital sources under management by the Transport Ministry as well as concerned agencies and units shall, apart from strictly complying with the provisions of the current Bidding Regulation, the Planning and Investment Ministry's circulars providing guidance on bidding and the provisions of the bidding and construction investment legislation, have to abide by the contents of these regulations.

Article 2.- Bidding conditions

1. The bidding conditions are prescribed in Article 9 of the Bidding Regulation issued together with Decree No. 88/1999/ND-CP, which was amended and supplemented by Clause 7, Article 1 of Decree No. 66/2003/ND-CP and the Planning and Investment Ministry's Circular No. 01/2004/TT-BKH of February 2, 2004 guiding the implementation thereof.

2. The notification of bid solicitation (or sending of invitations for bids) shall be carried out only after the approval of bidding dossiers and identification of capital plans or financial sources.

3. The selection of contractors through restricted bidding for bidding packages of construction investment projects must comply with the provisions of Article 100 of the Construction Law:

"Two or more enterprises of the same corporation, a corporation and its member companies, a parent company and its subsidiary companies, a joint-venture enterprise and a party contributing capital to the joint-venture are not allowed to jointly participate in bidding for the same bidding package."

Article 3.- On elaboration and submission for approval of project bidding plans

1. General provisions:

Bidding plans for group-A or -B projects and important national projects must comply with the provisions of Article 8 of the Bidding Regulation issued together with Decree No. 88/1999/ND-CP and Part two of the Planning and Investment Ministry's Circular No. 04/2000/TT-BKH of May 26, 2000 guiding the implementation thereof.

Particularly for group-C projects, bidding plans shall be elaborated and approved concurrently with feasibility study reports or investment reports according to the provisions of the Investment and Construction Management Regulation but the contents of such plans must comply with the provisions of the Bidding Regulation and the guidance of the Planning and Investment Ministry.

2. The contents of bidding plans submitted for approval must ensure all legal bases and information necessary for evaluation, consideration and approval in strict compliance with the provisions of the Planning and Investment Ministry's Circular No. 04/2000/TT-BKH of May 26, 2000. Concretely as follows:

2.1. The documents submitted for approval of a project- bidding plan include the following:

a/ Report on legal bases for elaboration and approval of the project-bidding plan:

- The decision on investment in the project or assignment of capital plan or the written permission for organization of bidding for the project, and other documents related to the project;

- The brief description of the project's scale, accompanied with the approved feasibility study report.

b/ Report on the situation of implementation of the project that can show the details of the following jobs:

- The jobs which have been done and are underway:

+ At the investment-preparation stage, these cover expenses for elaboration of the construction investment project.

+ At the investment execution-preparation stage, these cover the survey and design expenses, ground clearance compensation expenses, etc.

For each of the above-mentioned jobs it is necessary to point out documents permitting the execution thereof, the units in charge of execution, the value and time of execution of such jobs.

- The jobs, which will not go through bidding: The expenses for the project management board, ground-clearance expenses (except expenses for the construction of resettlement quarters and bomb and mine sweeping), payable fees, evaluation fees and reserve expenses, etc., must be detailed.

- The jobs, which will go through bidding: These include the remaining jobs of the project which should go through bidding, such as construction and installation, equipment supply and installation, bomb and mine sweeping and construction of resettlement quarters (if any), etc.

2.2. The contents of a bidding plan must strictly comply with the provisions of the current Bidding Regulation and guiding circulars of the Planning and Investment Ministry, and must clearly explain:

a/ The division of bidding packages and bases for calculation and determination of the value of bidding packages.

b/ The costs of bidding packages and financial sources.

c/ The forms of selecting contractors and modes of bidding:

- Forms of selecting contractors:

+ The principal form shall be unrestricted bidding.

+ In cases where the designation of contractors or restricted bidding is required, such must comply with the provisions of the current Bidding Regulation.

- The modes of bidding shall comply with the provisions of the Bidding Regulation and guiding circulars of the Planning and Investment Ministry.

d/ The time of bidding.

e/ The types of contract: shall be suggested to be compatible with the nature and time of execution of bidding packages.

f/ The suggested time for performance of contracts must ensure the conformity with the schedule of the ratified project, the feasibility of execution of each bidding package and the reasonable intervals between the times of completion of the project's bidding packages.

2.3. The documents accompanying reports submitted for approval:

When submitting bidding plans of projects, investors shall have to enclose the following legal documents:

a/ The investment decisions, enclosed with the approved feasibility study reports (preliminary designs, base designs and total investment capital structure), designs and cost estimates (if any).

b/ The documents and materials on capital-supply capability and actual situation of the projects.

c/ The other relevant documents, if any: The approved decisions on technical designs, cost estimates and total cost estimates (if any), bid-assignment decisions, decisions on designation of contractors for project-elaboration consultancy or design consultancy, etc.

3. Division of bidding packages:

The division of a project into bidding packages shall be based on technologies, technical characteristics or order of implementation of the project, with reasonable scale, ensuring that after completion, each bidding package may be efficiently exploited and does not give rise to additional expenses as a result of implementation of the project according to the set order. A project must not be divided into too small or too big bidding packages.

With regard to projects on construction of traffic routes (excluding medium- and large-sized bridges, tunnels and other special cases), the division of construction and installation bidding packages must ensure that the value of each bidding package lies in the following range:

a/ Group-C projects: For projects with total investment of over VND 15 billion each, the construction and installation part shall be divided into one or two bidding packages; the construction and installation part of a project valued at under VND 15 billion shall constitute only one bidding package.

b/ Group -B projects: Construction and installation bidding packages shall have value of between VND 30 billion and 50 billion, depending on the scale and value of the total investment amount.

For projects of this group with construction and installation value of under VND 30 billion, the entire construction and installation part shall constitute only one bidding package.

c/ Group- A projects: Bidding packages must be valued at least VND 70 billion. The division of construction and installation bidding packages valued at more than VND 100 billion is encouraged.

For cases other than the above-mentioned ones, investors must report them to competent persons for consideration and decision.

Article 4.- Compilation of bidding dossiers

1. Bases for compilation, submission and approval of bidding dossiers:

Bases for compilation of bidding dossiers shall comply with the provisions of Section II, Chapter I, Part Three of the Planning and Investment Ministry's Circular No. 04/2000/TT-BKH of May 26, 2000.

2. Contents of bidding dossiers:

2.1. General provisions:

a/ Bidding dossiers must contain all parts prescribed by the Bidding Regulation and guiding circulars of the Planning and Investment Ministry. The contents of parts of the bidding dossiers must ensure consistency.

Investors or their representatives shall be answerable to the persons with investment-deciding competence for the quality of bidding dossiers and their conformity with the approved designs and cost estimates.

In cases where the number of contractors registered to take part in bidding is larger than the number of designing dossiers to be submitted by designing consultants under regulations, the bid solicitors must make additional copies of the designing dossiers for sale to all registered contractors. In this case, the bid solicitors must affix certification stamps on such copies and take responsibility for their truthfulness to the originals.

b/ In the bidding dossiers, apart from the contents prescribed by the Bidding Regulation and guiding circulars of the Planning and Investment Ministry, there must also be the following contents:

- The contractors' plans for execution of bidding packages, which must clearly state the deadlines for completion of major project items.

- With regard to bidding packages on road improvement and upgrade under the construction-cum-exploitation conditions, contractors shall be requested to map out plans to ensure traffic convenience and safety as well as measures to ensure environmental sanitation.

The bidding volume estimates must cover items to ensure traffic with value equal to that of the approved cost estimates. After winning bids, contractors shall sign contracts to assign agencies in charge of road maintenance and repair to perform the work of ensuring traffic for road sections falling within the bidding packages. Contractors that have no measures to ensure traffic shall get failure points and be excluded.

With regard to construction projects in areas without agencies in charge of road maintenance and repair, contractors shall be permitted to undertake this work after reporting thereon to investors and obtaining their written consent.

- The contractors' bid dossiers must include declarations on their executive apparatuses and internal technical quality inspection systems, enclosed with the curricula vitae of assigned key positions so that the bid solicitors may evaluate and consider bids and have basis to conduct inspections during the performance of contracts.

2.2. Regulations on methods and criteria for evaluation of bid dossiers

The methods and criteria for evaluation of bid dossiers for bidding packages must be mapped out according to the provisions of the Bidding Regulation and guiding circulars of the Planning and Investment Ministry.

The bid-consideration methods must prescribe clearly that those contractors that have committed violations on quality or schedule or have been handled for the previous bidding packages, or that are financially incapable, shall have their points lowered in evaluation or be excluded in bid consideration.

For contractors that may be proposed to be bid winners, investors should verify and revaluate the actual financial capability of contractors that are capable of executing bidding packages, ensuring the quality, schedule and contractual conditions by considering the following contents:

- Examining contracts, which the contractors have been performing with assured quality and schedule as prescribed by the contracts.

- With regard to contractors that have won many bidding packages or are executing many bidding packages during the time of bid consideration, they shall be requested to explain measures for organizing the execution of bidding packages (their capability to mobilize finance, equipment and manpower for the execution of bidding packages). Based on the contractors' explanations, investors shall make evaluation and report to competent persons upon submission of bidding results.

2.3. Bidding volumes:

Bidding volumes of construction and installation bidding packages mean the total work volumes specified in the approved design dossiers.

Bidding volumes include basic volumes corresponding to the major structures.

In the course of compiling bid dossiers, contractors must base themselves on their technical criteria, construction processes and technical-technological solutions, which are suitable with the project progress, to incorporate other necessary volumes.

2.4. Regulations on formulation of construction drawings:

With regard to construction and installation bidding packages, which require contractors to make construction drawings, the bidding dossiers should each provide for a number of the following contents:

a/ The estimated cost of consultancy for survey and design of construction drawings which are formulated, evaluated and approved according to the State's regulations by a separate decision. This cost estimate shall not be included in the approved cost of the construction and installation bidding package for bid consideration.

b/ After obtaining the bidding results and the approved cost estimate for surveys for the construction drawing design, the concerned investor shall have to carry out procedures to include the value of this cost estimate into the value of the bid-assignment contract; the bid-winning contractor shall have to base on this cost estimate to conduct surveys (if having business registration) or hire a specialized consultancy organization to conduct surveys for construction drawing design according to regulations.

A bid-winning contractor that signs contract on hiring construction drawing design consultants with value larger than the value of the approved cost estimate shall have to bear all extra expenses.

c/ In cases where a contractor has no full legal person status as well as capabilities and experiences to conduct surveys for construction drawing design, it must declare (one or some) qualified consultancy organizations that it plans to hire for performance of this job. Bid dossiers of contractors that fail to declare their legal person status, capabilities and experiences to conduct surveys for construction drawing designs shall be excluded in the bid-consideration process.

Bid-winning contractors shall have to organize surveys for construction drawing designs (even in cases where they have to hire consultancy organizations) right after receiving bid-winning notices and shall have to comply with the Transport Ministry's Directive No. 13/2003/CT-BGTVT of May 29, 2003 so as to ensure the projects' quality and progress.

d/ Apart from the above-mentioned contents, investors shall also be responsible for the following contents:

- Ensuring that the value of the cost estimates of construction drawing designs represents the prescribed percentage of the total designing cost calculated on the basis of the State's norms (for traffic works this value represents 30% of the total designing cost);

- Being responsible for examining the quality of the surveys for formulation of construction drawings as compared with the technical design survey. If detecting any errors in the surveys for technical designs according to the approved schemes, investors shall, depending on the seriousness of violations, report and suggest forms of handling concerned collectives and individuals and propose persons with investment-deciding competence to handle them according to the Transport Minister's Decision No. 4391/2002/QD-BGTVT of December 27, 2002 and current regulations.

Article 5.- Organization of bid solicitation in form of unrestricted bidding

1. Announcement of invitation for bids

1.1. In furtherance of the Planning and Investment Ministry's Document No. 7304/BKH-QLDT of November 16, 2004, as from April 1, 2005 notices on invitation for unrestricted bidding for construction and installation bidding packages and procurement bidding packages valued at VND 20 billion or more and consultancy bidding packages valued at VND 5 billion or more must be published in the Planning and Investment Ministry's "Vietnam Public Procurement" (bidding information bulletin).

Before April 1, 2005, the announcement of invitation for bids for the above-mentioned bidding packages must be published in at least one central newspaper distributed nationwide (e.g. Nhan Dan (The People) Newspaper, Lao Dong (Labor) Newspaper) or in "Vietnam Public Procurement" bulletin or in both above-mentioned media.

1.2. With regard to construction and installation, procurement or consultancy bidding packages with value smaller than the levels mentioned at Point 1.1 above, the invitation for bids must be published in at least one central newspaper circulated nationwide.

1.3. Notices on invitation for bids must be published in at least three consecutive issues of "Vietnam Public Procurement" bulletin or the above-mentioned mass media.

1.4. Bidding dossiers shall be distributed at least 10 days (or 5 days for small bidding packages) after the date of publication of the first bidding notice.

2. Regarding detailed information at places of registration and distribution of bidding dossiers:

To help contractors make self-evaluation before deciding to participate in bidding, bid solicitors must provide specific information at places of registration and distribution of bidding dossiers on the following contents:

2.1. The scope and scale of a bidding package, information on natural, terrain and geo-hydrological conditions of the construction site of such bidding package (excluding information on its costs and cost estimates).

2.2. The conditions and minimum requirements on capabilities and experiences of contractors participating in bidding.

2.3. The other necessary information as prescribed in the Bidding Regulation, the Planning and Investment Ministry's Circular No. 04/2000/TT-BKH of May 26, 2000 and Circular No. 01/2004/TT-BKH of February 2, 2004 and other related contents.

3. Mode of registering participation in bidding, sale of bidding dossiers and submission of bid dossiers:

3.1. The registration of participation in bidding, purchase and sale of bidding dossiers shall be carried out right at the places where bidding dossiers are sold and during the sale of bidding dossiers.

a/ The time for sale of bidding dossiers must be at least 2 working days.

b/ The persons making registration and purchasing bidding dossiers must submit introduction papers signed by the contractors' leaders and affixed with the contractors' stamps, together with their self-declarations, clearly stating their names, ages, work positions, addresses and contact phone numbers as well as commitments that they are the right persons designated in writing by their respective enterprises to buy the bidding dossiers, and shall have to sign such self-declarations. Those persons who want to buy bidding dossiers but fail to meet these requirements shall not be allowed to buy them.

In the course of bid consideration, if declarations are found untruthful, the related dossiers shall be rejected.

c/ Bid solicitors must not impose their own will but shall base on the contractors' wish to register the purchase of bidding dossiers to sell such dossiers. In case of lack of bidding dossiers for sale to contractors due to the large number of bid-participating contractors, bid solicitors shall have to print more bidding dossiers to meet the contractors' purchase demand within the prescribed time limit. In this case, bid solicitors shall have to affix stamp on copies of bidding dossiers and take responsibility for the truthfulness of these copies.

3.2. Submission of bid dossiers:

The submission of bid dossiers shall comply with the timetable stated in the bid-invitation notices. In case of change of the bidding timetable, bid solicitors must promptly notify such to all contractors participating in bidding for such bidding packages. Bid solicitors must not receive bid dossiers of contractors outside the list of contractors registered to purchase the bidding dossiers.

When preparing their bid dossiers, contractors, that have registered to purchase bidding dossiers, may join in partnership with other contractors in order to participate in bidding for the registered bidding packages. In this case, the partnership must consist of at least one contractor named in the list of those who have bought the bidding dossiers.

4. Some other regulations:

4.1. Investors shall take responsibility for the whole bidding process in strict compliance with the current regulations.

4.2. Bid-participating contractors shall be responsible for information declared when purchasing the bidding dossiers and protect their right to participate in bidding by themselves in strict accordance with the provisions of the current Bidding Regulation as well as the Transport Ministry's regulations on bidding.

4.3. In cases where problems arise beyond their competence or where irregularities are detected, investors should promptly report such to competent persons or competent authorities for consideration and settlement.

Article 6.- Minimum requirements on capabilities and experiences of contractors participating in bidding

To participate in bidding, contractors must meet the requirements prescribed at Point 1, Clause 1, Part I of the Planning and Investment Ministry's Circular No. 01/2004/TT-BKH of February 2, 2004.

In the course of bidding, if deeming it necessary, bid solicitors may request contractors to prove the existence and normal operation of their respective enterprises. Then, contractors shall have to explain and submit certifications of their existence and normal operation, issued by the agencies that have signed their establishment decisions or by their superior agencies or the agencies that have granted them business registration certificates, together with written certifications of tax offices for bid solicitors to consider and evaluate. Contractors that fail to meet the requirements of bid solicitors shall be excluded.

The minimum requirements on capabilities and experiences of contractors participating in bidding for construction and installation bidding packages are as follows:

1. Working time and experiences:

1.1. For group-A projects' bidding packages, contractors must have at least 5 years' experiences of operating in branches suitable to the requirements of such bidding packages.

1.2. For group-B projects' bidding packages, contractors must have at least 3 years' experiences of operating in branches suitable to the requirements of such bidding packages.

1.3. For group-C projects' bidding packages, contractors must have at least 2 years' experiences of operating in branches suitable to the requirements of such bidding packages.

2. Experiences of specialized operation during the time prescribed in Clause 1 of Article 6:

2.1. A contractor must have performed and completed at least one contract with technical aspects similar to those of the concerned bidding package with the contractual value not lower than the value of such bidding package, or have participated in and completed 2 or 3 contracts with technical aspects similar to those of the bidding package, provided that the realized total value of such contracts is bigger than the value of the bidding package.

2.2. In cases where contractors constitute a partnership of construction enterprises participating in bidding, apart from the conditions prescribed for an independent contractor mentioned above, the unit leading the partnership must perform and complete at least one contract with similar construction techniques and a value not lower than 60% of the value of the bidding package.

The above-mentioned similar contracts must be certified in writing by project investors to have been completed with set quality, on schedule and with responsibility in the contract-performance process. In cases where the project investors are dissolved, the contract liquidation records or works hand-over records must be submitted.

3. Financial capability:

3.1. The contractor's total after-tax profit in three consecutive years must not be below zero.

In case of partnership contractors, all partners must meet this requirement.

3.2. The contractor's average construction and installation turnover in three consecutive years must be bigger than, or equal to, the double value of the relevant bidding package.

For partnership contractors, the average turnover of three consecutive years shall be calculated as equal to the total turnover of the involved parties, of which the turnover of the partnership leader must be bigger than 60% of the above-prescribed level and must not be lower than the percentage of the bidding package undertaken by partnership leader as agreed upon in the partnership contract.

3.3. Contractors participating in bidding must prove their actual financial capabilities according to the investors' requirements.

Article 7.- On construction and installation bids

1. When calculating bids, apart from calculating all necessary expenses for the completed works under guidance in the bidding dossiers, contractors must also calculate the following expenses according to the State's current regulations:

1.1. Wage regimes and policies towards laborers;

1.2. Regime of construction means, equipment and machine depreciation;

1.3. Deductions to pay taxes, charges and fees.

2. The bids offered by contractors must cover all the above-mentioned expenses as well as common expenses for their internal quality management systems.

3. With regard to bidding packages under construction investment projects, contractors are prohibited to offer bids lower than the work construction costs (as prescribed in Clause 7, Article 10 of the Construction Law).

4. The contractors' bid dossiers enclosed with their offered bids must include analysis of detailed unit prices that constitute bids of construction and installation volumes in the bidding volume estimates, which must be clearly stated by bid solicitors in the bidding dossiers and include the following unit prices:

4.1. All bid unit prices falling within work items offered for bidding with a value:

a/ Exceeding 2% of the total bid, for bidding packages valued at more than VND 15 billion each.

b/ Exceeding 5% of the total bid, for bidding packages valued at less than VND 15 billion each.

4.2. Bid unit prices falling within work items that tend to arise in the construction process (e.g. mud dredging, riverbed or seabed dredging or treatment of weak foundation, etc.)

4.3. A number of bid unit prices falling within major structures of works (to be specified in bidding dossiers, depending on the technical nature and requirements of bidding packages), including:

- The unit price of soil and rock digging for works' foundation,

- The unit price of soil, rock and sand embankment for works' foundation,

- The unit price of road base and surface,

- The unit price of assorted foundation piles,

- The unit price of concrete and reinforcement of bridge frame, abutment and bearing of all kinds,

- The unit price for production and installation of culverts with diameter of 1.0 m or bigger (D ³ 1.0 m),

- The unit price of assorted bridge beams,

- The unit price of concrete and reinforcement of high-rises' foundation,

- The unit price of construction of high-rises' frames

- The unit price of concrete and reinforced frame pillars of high-rises,

- The unit price of reinforced beams and braces of high-rises' floors, and

- The bid unit prices of a number of other major structures.

5. In the bid consideration and evaluation process, if bid solicitors find in bid dossiers irrational bids, irrational ratios or structure of prices between parts or items of bids, compared with those already approved by competent authorities under the State's regulations, they may request contractors to make explanation for consideration and handling.

Bid solicitors must thoroughly consider so as to properly determine unit prices of items that require large material expenses as well as structures that may affect the works' safety and durability (structure of bridge beam, abutment and bearing, foundation piles, road foundation and surface, bearer frames, etc.). If contractors offer low unit prices, bid solicitors should request them to clarify irrationalities of such unit prices and if the contractors' written explanations are not clear enough, the contractors' unit prices shall be considered wrong upon bid consideration.

Article 8.- Modes of determining and handling irrationalities in construction and installation bids

1. Bids of construction and installation bidding packages:

1.1. To be 15% lower than the approved construction and installation cost estimates, for bidding packages on the construction of bridges, roads, ports and ground-leveling works.

1.2. To be 10% lower than the approved construction and installation cost estimates, for bidding packages on the construction of house structures, electricity supply or water supply or drainage systems.

Those bids, which are lower than the said levels, may cover up price irrationalities, and unit prices that lead to such low bids should be thoroughly examined.

2. In the course of evaluating bids, bid solicitors have the right to request explanation and contractors have the responsibility to explain about bid unit prices, especially the irrational ones. If the contractors' explanations are not trustworthy enough, bid solicitors may, on the basis of the extent of irrationality, consider the feasibility of bid dossiers in accordance with current regulations.

Factors taken into consideration when examining the extent of irrationality of bid unit prices include:

2.1. The labor unit costs do not correspond to the job titles under the State's current regulations.

2.2. The VAT rates and other taxes prescribed by the State fail to conform with the tariffs under the State's current regulations.

2.3. There are not enough expense items corresponding to technological solutions, measures of organizing construction and construction progress as suggested in the contractors' bid dossiers and the current construction processes or there are not enough expenses for the implementation of solutions to ensure traffic safety (for bidding packages on improvement of traffic roads), and there are no expenses for quality management systems, arrangement of construction sites and environmental protection.

2.4. The unit prices of construction materials delivered to construction sites, norms of expenses for labor, construction materials and machines within the detailed unit prices constituting bids are much lower than the prices of materials set by competent agencies and current norms set by the State.

2.5. The percentages of common expenses or other expenses are calculated much lower than the State-prescribed levels.

2.6. With regard to bid dossiers with big difference between bid percentages or structures and the approved cost estimates (prescribed in Clause 5, Article 7) or with irrational and unfeasible bid percentages or structures, bid solicitors must thoroughly consider them. In case of big irrationality or unfeasibility, bid solicitors and the experts' teams should reach agreement to exclude the concerned bid dossiers and state clearly such in the bid-consideration reports.

3. The method of handling irrational bid unit prices in bid dossiers with price irrationalities, which, however, need not to be rejected, shall be implemented as follows:

The experts' team and evaluation council of each investor shall suggest methods of handling irrational unit prices. Based on the members' agreement, the investor's leadership shall decide on measures to deal with irrational unit prices along the direction of replacing them with the highest unit prices offered in other bid dossiers in the shortlist. This must concurrently be stated in the bid-consideration reports upon the submission of bidding results.

For cases mentioned at Point 2.6 and in Section 3 above, the group of evaluating consultants of the investment-deciding authority shall thoroughly examine the investor's bid evaluations before submitting them to the person with investment-deciding competence for decision.

Article 9.- Regulations on partnership

In cases where contractors join in a partnership to participate in bidding, they must comply with the following regulations:

1. All contractors in the partnership must have full civil legal capacity as prescribed by the Bidding Regulation and the Planning and Investment Ministry's Circular No. 01/2004/TT-BKH of February 2, 2004. They must also have minimum capabilities and experiences as prescribed in the bidding dossiers, corresponding to the work volumes they undertake in the partnership.

2. Contractors may each file only one application for participation in bidding for one bidding package, regardless of whether they participate in bidding as independent contractors or partnership.

3. The number of partners in a partnership for construction and installation bidding is prescribed as follows:

3.1. For construction and installation bidding packages valued at VND 70 billion or more each: Not more than 3 partners;

3.2. For construction and installation bidding packages valued at between VND 15 billion and VND 70 billion each: Not more than 2 partners;

3.3. With regard to construction and installation bidding packages related to ordinary roads (without items falling in construction and installation branches that require business registration of different kinds), valued at under VND 15 billion, enterprises may only participate in bidding as independent contractors.

In other cases, investors shall make suggestions upon submission of bidding dossiers for approval so that the evaluating agency may report them to competent persons for decision.

4. On the nomination of a unit leading a partnership: Contractor leading a partnership must be unanimously nominated by all members of such partnership. Such contractor must have full capabilities and experiences to organize the performance of contracts of bidding packages and must undertake a work volume corresponding to the minimum value prescribed below:

4.1. That is bigger than or equal to 60% of the contractual value, for 2-member partnership;

4.2. That is bigger than or equal to 40% of the contractual value, for 3-member partnership;

4.3. That is not less than 25% of the contractual value, for other members of the partnership.

5. The application for bidding participation and bid dossiers of a partnership must be signed by lawful representative and affixed with stamp of the contractor leading the partnership.

In cases where the lawful leader of the contractor leading the partnership, for some reason, does not sign the partnership's application for bid participation in bidding, all lawful leaders of contractors in the partnership shall make written authorization for one person in the leadership of the contractor leading the partnership to act as representative of that contractor to sign the partnership's application for participation in bidding.

6. The partnership of contractors participating in bidding (called partnership contractors for short) must enter in a partnership contract or agreement (referred collectively to as partnership contract), which shall be signed by the lawful leaders of the contractors in the partnership for participation in bidding for a specific bidding package.

7. The validity of a partnership contract is prescribed as follows:

7.1. It satisfies the requirements prescribed in Article 9.

7.2. The partnership contract (or agreement) must clearly state the following:

a/ The name of the partnership;

b/ The names of the partnership members as well as their addresses and contact phone numbers, etc.

c/ The member leading the partnership;

d/ The purpose of the partnership that is to participate in bidding for the bidding package (the name, position, length of road section to be built and scope of the bidding package and project for which the partnership joins in bidding);

e/ The shares of work value, volumes and contents among the partners if they win the bid;

f/ The responsibilities and powers of the partnership leader and each partner;

g/ The effective term of the partnership contract;

h/ The other contents.

7.3. There's a written commitment of the contractor leading the partnership to the investor regarding its responsibility to ensure the set quality and schedule of the whole bidding package in any circumstances if the partnership wins the bid (even when the partners are incapable of performing the assigned work volumes).

In cases where the partnership fails to meet all requirements in this Article, they shall be excluded upon consideration of bids.

8. In the course of performing contracts of a bidding package:

- The partnership must not arbitrarily change the work volumes and contents stated in the partnership contract upon their participation in bidding;

- In cases where it is necessary to change the assigned work volumes and contents, the partnership contractors must send written explanations to the investor so that the latter may report such to competent authority for consideration and approval before issuing decision to permit such changes.

Article 10.- Regulations on subcontractors

1. In case of using subcontractors, contractors shall have to make suggestion in their bid dossiers and make declarations in a form set in bidding dossiers.

2. Qualified subcontractors must meet the following requirements:

2.1. Having full civil legal capacity as prescribed.

2.2. Having full capabilities and experiences suitable to the assigned jobs.

2.3. The total value of work volumes taken by subcontractors must not exceed 40% of the contractual value of a bidding package.

2.4. Having full documents proving that they meet the above-mentioned requirements.

3. Contractors shall take full responsibility before investors and before law for the quality and tempo of execution of bidding packages according to the bid-assignment contracts already signed with investors, even for the jobs performed by subcontractors.

4. In the course of performing contracts, contractors must not arbitrarily replace or add subcontractors that are not named in bid dossiers.

In cases where it is necessary to replace or add subcontractors, contractors shall have to submit written explanations to investors for consideration and further reporting to persons with investment-deciding competence. After getting approval from the persons with investment-deciding competence, investors shall issue decisions to allow the replacement or addition of subcontractors.

Investors shall be answerable to the persons with investment-deciding competence for their own decisions mentioned above.

5. The corporations (or parent companies) participating in bidding must declare in their bid dossiers lists of member companies that will execute bidding packages if they win the bids, the work volume and value to be assigned to each member. In this case, member companies expected to execute bidding packages shall be considered subcontractors of the corporations. In the course of performing contracts, if wishing to replace member companies to execute bidding packages, corporations shall have to comply with the provisions of Clause 4 of this Article.

6. If deeming that subcontractors have weaknesses in the performance process, investors may issue notices requesting contractors to continue undertaking the remaining work volumes and take responsibility therefor according to the provisions of Clause 3 of this Article.

In cases where it is deemed that even contractors are unable to execute the above-mentioned work volumes, investors may reduce such volumes and transfer them to other subcontractors according to the provisions of Article 11.

Article 11.- On handling of violations

1. Regulations on handling of contractors that commit quality violations

In the course of performing contracts, if contractors commit quality violations, they shall be handled according to the Transport Minister's Decision No. 4391/2002/QD-BGTVT of December 27, 2002.

2. Regulations on handling of contractors that commit schedule violations

2.1. A number of definitions and provisions

a/ Contract schedule is understood as the schedule of bid-assignment contracts signed between investors and contractors, corresponding to the work volumes stated in bidding dossiers, not to mention the unexpected volumes and force majeure circumstances (natural calamities, floods, slow ground clearance, etc.)

In cases where unexpected volumes or other force majeure circumstances arise, the time for execution of such volumes shall, in principle, be added to the time for performance of the contracts.

b/ Schedule violations mean violations on schedule at each stage of performance of contracts and violations on schedule for completion of contracts at the contractors' faults, including violations of extended schedule (resulting from the appearance of unexpected volumes and other force majeure circumstances).

c/ Stages of contract performance shall be determined on the basis of the completion of major project items. The ending point of a stage shall be the landmark for consideration and evaluation of contractors' violations on progress.

Basing themselves on the projects' implementation plans and specific requirements of contracts, investors shall determine and announce time points for consideration and evaluation of the above-mentioned implementation progress.

d/ In cases where the implementation progress is slow due to objective causes, contractors must send investors reports on reasons therefor, time of delay and suggestions.

Within 15 days after receiving contractors' reports, investors shall have to consider and give written replies, which shall serve as a basis for handling the schedule-violation liabilities.

2.2. Regulations on handling of schedule violations:

In the course of performing contracts, contractors that commit schedule violations shall, depending on the seriousness of their violations, be handled as follows:

a/ First-time violations:

10 days after identifying contractors committing schedule violations, investors shall issue notices to criticize such contractors and, at the same time, request the latter to make commitment to remedy their violations.

b/ Second-time violations:

10 days after identifying contractors with second-time schedule violations, investors shall issue reprimand notices and request such contractors to make written commitments with the following contents:

- A commitment that if the contractors fail to take remedial measures at the investors' request, they shall have part of their contracts cut and transferred to new subcontractors to be selected by investors.

- In cases where it is necessary to transfer work volumes, if the bid-winning unit prices are lower than the unit prices set by the State at the time of transfer, the unit prices applicable to additional subcontractors shall be the ones set by the State at the time of transfer of the contracts. In this case, investors shall submit to persons with investment-deciding competence for approval the cost estimates of the transferred work volumes, which are calculated according to the new unit prices and serve as basis for performance of the contracts. The contractors shall have to bear all expenses arising on top of the bid-winning unit prices.

- Investors shall have the right to make direct payment to subcontractors for the transferred work volumes.

- The said written commitments shall constitute annexes of the concluded bid-assignment contracts.

c/ Schedule violations committed for the third time onward:

10 days after identifying contractors that commit schedule violations for the third time onward, apart from transferring work volumes of such contractors under contracts as mentioned in Section 2.2 above, investors should evaluate the actual capabilities of such contractors so as to consider the termination of the contracts and report such to competent persons for decision.

Within 15 days, the assisting agencies shall have to submit to competent persons written replies to investors.

2.3. Regulations on the transfer of work volumes to subcontractors or termination of contracts:

a/ Transfer of work volumes within a partnership:

If members of a partnership commit schedule violations, investors shall decide to transfer work volumes among members of such partnership after reaching written agreement with the partnership leader on the transferred volumes, the member units to receive such volumes, the unit prices applicable to the transferred items and the implementation tempo. This document shall constitute an annex of the concluded bid-assignment contract.

In this case, investors shall have the right to make decision and be answerable to the persons with investment-deciding competence and submit reports to the latter before implementation.

b/ Transfer of work volumes to subcontractors outside a partnership:

When contractors in a partnership fail to perform the contractual work volumes according to the set schedule, their work volumes shall be reduced by no more than 60% for transfer to other subcontractors outside the partnership for execution. In this case, investors shall have to reach written agreement with the partnership leader on making it an annex of the concluded contract with contents similar to those mentioned at Point a above.

In this case, investors shall have the right to select subcontractors, decide on the transfer, be answerable to the persons with investment-deciding competence and report in writing to the latter before implementation.

c/ Termination of contracts with contractors:

With regard to contractors that commit schedule violations for the third time onward or that have incompetent capabilities, failing to meet the requirements for performance of the contracts, investors shall carry out procedures to terminate and liquidate such contracts.

- If the remaining work volume do not exceed 50% of the contractual value, investors shall select new contractors with full capabilities to execute the remaining volumes of the contracts. The unit prices applicable to new contractors shall comply with the provisions of Section 2.2 above. In this case, the contractors with terminated contracts shall bear expenses for all arising material damage, including damage incurred from the change of unit prices assigned to new contractors.

- In cases where the remaining work volumes exceed 50% of the value of bidding packages, the contract liquidation is required and the procedures to restart the bidding must be carried out (even in case of contractor designation).

With regard to the above-mentioned cases, investors shall have to work with violating contractors, make handling records and submit them to persons with investment-deciding competence for decision and organization of implementation.

2.4. Economic sanctions against schedule violations

Apart from sanctions being the transfer of work volumes and cutting for transfer of contracts mentioned in Sections 2.2 and 2.3 above, violating contractors shall also be handled economically as follows:

a/ If contractors break the schedule, thus causing losses and/or damage, investors shall have to report to competent persons on the contents of violations, evaluate and determine the value of such losses and/or damage caused at the contractors' faults and propose forms of sanctioning such contractors in order to make up for such losses and/or damage.

b/ The concluded contracts must specify economic sanctions against schedule violations caused at contractors' faults. The handling of violations shall comply with the principle that the value of sanction shall be calculated in percentage over the number of days during which the schedule violations are committed, which shall be between 0.05% and 0.1% of the contractual value for each day of violation. The total fine value must not exceed 12% of the contractual value as prescribed by the Construction Law.

2.5. Administrative handling measures applicable to schedule-breaking contractors:

Contractors breaking schedule of performance of contracts shall, apart from being handled according to the above-mentioned measures, be administratively handled as follows:

a/ Criticism, reprimand or caution:

- First-time schedule violations: Investors shall issue documents on severe criticism.

- Second-time schedule violations: Investors shall issue reprimanding documents and report such to the persons with investment-deciding competence.

- Schedule violations to the extent of compulsory termination of contracts: Investors shall issue documents to report such to the Ministry and issue cautioning decisions.

b/ Prohibiting participation in bidding for the subsequent projects in the transport service:

- Contractors having 60% of their contractual value cut and transferred shall not be allowed to participate in bidding for other projects of the transport service for 6 months.

- Contractors having contracts terminated shall not be allowed to participate in bidding for other projects of the transport service for one year.

2.6. Schedule-breaking contractors that have their contracts terminated and liquidated shall be announced on the Planning and Investment Ministry's website and "Vietnam Public Procurement" bulletin.

3. Handling of investors' liabilities:

3.1. Investors that let contractors commit quality violations shall be handled according to the Transport Minister's Decision No. 4391/2002/QD-BGTVT of December 27, 2002.

3.2. Handling of investors' liabilities in case of quality violation by contractors:

a/ On reporting and monitoring the implementation tempo:

Monthly, investors shall revise all underway contracts under their management, make reports assessing violations of the contract schedule, clearly stating names of violating contractors, the current contract-performance situation as well as the redressing acts of the violating contractors (according to the set forms). The investors' reports shall be sent to the Ministry and the Department for Quality Expertise and Management of Traffic Works.

b/ Handling of investors' liabilities for reporting on schedule:

If contractors commit schedule violations but investors fail to promptly report or wrongly report such, their heads (general directors, project management boards or directors of provincial/municipal services…) shall be handled as follows:

- Reprimand for any delay in reporting for up 3 months;

- Caution for any delay in reporting for up to 6 months or for untruthful reports.

c/ Handling of investors in selection of contractors:

Investors who inaccurately evaluate contractors' capabilities, thus selecting incapable bid-winning contractors and letting schedule violations occur shall be handled as follows:

- In cases where schedule violations arise with 3 contracts in one year, the heads of the investing units shall be reprimanded;

- In cases where schedule violations arise with 4 or more contracts, the heads of the investing units shall be cautioned;

3.3. Depending on the seriousness of the investors' violations, the persons with investment-deciding competence shall consider whether to assign them to be investors of the subsequent projects.

Article 12.- Regulations on implementation

1. These regulations take effect 15 days after their publication in the Official Gazette.

2. In the course of application, the regulations issued together with this Decision shall be updated and amended to be compatible with the State's new regulations on relevant matters.

3. The investors and their representatives, the management boards of projects financed with domestic capital sources under the Transport Ministry's management and the heads of the agencies and units in the transport service shall have to implement this Decision./.